TEMPO.CO, Jakarta – Morgan Stanley Capital International (MSCI) has confirmed Indonesia’s classification as an emerging market in its latest market‑classification review, released on 24 June 2026. Indonesia joins other Asia‑Pacific economies such as China, India, South Korea, Malaysia, the Philippines, Taiwan and Thailand in this group.
MSCI noted that institutional investors frequently raise concerns about the opacity of stock‑ownership structures and the possibility of coordinated trading practices. In its Market Classification Review 2026 announcement, MSCI wrote that “these issues materially limit investors’ ability to assess true free‑float levels and to rely on market prices for portfolio construction and index replication.”
The index provider linked these challenges to the information‑flow and market‑infrastructure pillars of its market‑accessibility framework, indicating they could deter investment in Indonesia.
Nevertheless, MSCI recognised recent reform efforts by Indonesia’s Financial Services Authority (OJK), the Indonesia Stock Exchange (IDX) and the Central Securities Depository (KSEI). The measures include greater transparency for stock holdings above 1 percent, more granular investor classification, a framework for high‑concentration ownership, and an increase in the minimum free‑float requirement to 15 percent.
“While these steps are encouraging, international institutional investors need consistent implementation and lasting impact across the market,” MSCI said. The provider will continue monitoring the coverage, consistency and effectiveness of these reforms.
MSCI added that if the Indonesian capital market does not demonstrate sufficient progress by November 2026, it will consider alternative treatments, including a possible reclassification from emerging‑market to frontier‑market status.
